IN THE COURT OF APPEAL OF LESOTHO
HELD AT MASERU
C OF A (CIV) NO.47в OF 2013
CCT/206/2008
In the matter between
TUMO TLELAI t/a LESOTHO MINERAL
EXPLORATION
APPELLANT
And
THE LIQUIDATOR, LESOTHO BANK
(IN LIQUIDATION)
CORAM:
RESPONDENT
K. E. MOSITO P
P.T.DAMASEB AJA
M.C. CHINHENGO AJA
HEARD:
23 JULY 2015
DELIVERED:
7 AUGUST 2015
2
SUMMARY
Appeal from the High Court – High Court having dismissed an
application for rescission on the basis that it was time-barred – Hire
purchase Act 1974 requires that the goods be transferred (delivered)
- there being no proof that the caterpillar allegedly sold to the
appellant was as a fact delivered – Court of Appeal exercising its
discretion to decide the appeal on the ground other than the ones
set forth in the grounds of appeal and relied upon by the parties in
the interest of justice.
Appeal succeeding with no order as to costs – matter remitted to the
High Court to enable the appellant to file his plea and defend the
action.
JUDGMENT
MOSITO P
[1]
This is an appeal against an order, with costs, by the
Commercial Division of the High Court (Molete J).The facts
giving rise to this appeal are that, on 7 October 1993 and at
Maseru, the respondent as “the seller” and the appellant as
“the purchaser” entered into a hire purchase agreement. In
terms of the said agreement, the respondent was to sell to the
appellant a motor vehicle described as a “caterpillar 910
front-end, chassis/serial number 8OU08409.”
The full
purchase price agreed on was the sum of M104, 310.37 (One
hundred and four thousand, three hundred and ten Maloti
and thirty seven Lisente) including finance changes.
[2]
A deposit of M28, 366, 67 (twenty eight thousand three
hundred and sixty six Maloti and sixty seven Lisente) was
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payable on or before signature of the agreement. The amount
of M104, 310.37 (One hundred and four thousand, three
hundred and ten Maloti and thirty seven Lisente) was payable
in monthly instalments of M2, 109.55(Two thousand one
hundred and nine Maloti and fifty five Lisente) and a final
instalment of M2, 109.45 (Two thousand one hundred and
nine Maloti and forty five Lisente) over thirty five months. The
first instalment was payable on 28 November 1993 and
subsequent instalments on the 28th day of each succeeding
month thereafter until the whole purchase price would have
been paid.
[3]
It was a material term of the agreement that, should the
appellant default in the punctual payment of any instalment
or any other amount falling due in terms thereof, or fail to
observe or perform any other of the terms, conditions and/or
obligations of the agreement, the respondent would, subject
to the Hire Purchase Act No. 27 of 1974 or any amendment
thereto, in its election and without prejudice to any other
rights, to take certain specified steps.
[4]
The respondent alleges in its declaration that it performed its
obligations in terms of the agreement and that the caterpillar
was delivered to the appellant on behalf of the respondent.
The respondent further alleges that in breach of his
obligations in terms of the agreement, the appellant failed to
make payment of certain instalments and as at the 10th day
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of August, 2008 the appellant was in arrears in an amount of
M72,689.73 (seventy two thousand six hundred and eighty
nine Maloti and seventy three Lisente). In the circumstances
the respondent instituted an action in the Commercial
Division of the High Court for judgment in the following
terms:
“(a)
Payment of the amount of M72, 689.73 (Seventy
two thousand six hundred and eighty nine Maloti
and seventy three Lisente).
(b)
Interest on the said amount of M72, 689.73
(Seventy two thousand six hundred and eighty
nine Maloti and seventy three Lisente) at the rate
of 18.25% per annum a tempore morae to date of
payment.
(c)
Cost of this suit on the scale as between Attorney
and own Client.
(d) Further and alternative relief.”
[5]
On 19 February 2009, the respondent obtained judgment by
default from the Court a quo for the sum claimed in the
summons.
A writ of execution was subsequently issued
against the appellant on 23 March 2009. The appellant filed
an application for rescission and stay of execution by way of
Notice of Motion. In the affidavit supporting the application,
he (Tumo Tlelai) denied that he ever received a summons to
appear in Court. He attempted to dispute that he and “2nd
applicant” were two separate entities. However a reading of
the papers filed of record did not reveal that there was a “2 nd
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applicant”. He also attempted to dispute that he entered into
an agreement for a loan in his personal capacity. He also
deposed that no caterpillar was ever bought for him by the
respondent.
[6]
Appellant further averred that if ever the respondent bought
a caterpillar for him, it ought to have proven that as a fact
such agreement was concluded and attached the registration
certificates as well as ownership papers on to papers because
in agreement of hire purchase, ownership passes to the buyer
upon completion of payment of the debt.
He therefore
charged that he ought to have been shown such papers as
they should be in the possession of the respondent.
[7]
In proof of its claim and in reaction to the application for
rescission, the respondent annexed an invoice addressed to
Barlows, Box 1088, Bloemfontein 9300. The invoice is on the
letterhead of J & G Transport and is dated 14 September
1993.
It indicates that on 9 September 1993, there was
transported D910 from Ladybrand to Kao junction. It also
reflects a waybill number, an amount and a truck number.
[8]
The appellant however denies that the said invoice proves that
payment was made on his behalf or on behalf of Lesotho
Mineral Exploration (Pty) Ltd. He avers that there is no way
J & G transport could deliver the property to him before an
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agreement was entered into. This he says because the invoice
is dated 14 September 1993 while the Hire Purchase
Agreement is dated 6 October 1993. He also avers that the
delivery invoice does not expressly show that it was made to
his place of business and it does not even show as to who
received the property on his behalf.
He avers that the
respondent should have shown as to who amongst appellant’s
employees received the property.
[9]
On 26 September 2003, Molete J dismissed the application
for rescission and ordered that, “the application is timebarred to the extreme and the applicant has failed to
discharge the onus on him to dispute the service by the
Sheriff.”
He consequently dismissed the application with
costs.
[10] The appellant noted an appeal to this Court. His grounds of
appeal are reproduced below:
“1.
The learned judge erred and/or misdirected
himself by holding that the appellant’s rescission
application is time-barred basing himself on the
return of service for service of summons not on the
date of knowledge of default judgment.
2.
The learned judge erred and/or misdirected
himself by holding that rescission application is
time-barred basing himself on the date the writ of
execution was issued notwithstanding the fact
that there is no proof that writ of execution was
ever served upon the appellant until in August,
2011.
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3.
The learned judge erred and/or misdirected
himself by holding that appellant’s rescission
application is time-barred basing himself on the
notice of appearance to defend saying appellant
knew of the matter and failed to defend it.
4.
The learned judge erred and/or misdirected
himself by holding that rescission application is
time-barred basing himself on the merits of the
matter, whether appellant’s explanation for not
defending the matter was sufficient or not in
limine.”
[11] Quite clearly therefore, the appellant took issue with the
decision for the reason that the judge a quo arrived at the decision
that the application was hopelessly out of time having had regard
to the date of service of the summons, the date on which the writ
of execution was issued, the date on which an entry of appearance
to defend was purportedly filed on appellant’s behalf and the
explanation proffered by the appellant for not defending the
matter. These were the specific grounds of attack by the appellant
of the decision of the court below. In terms of Rule 4 of the Rules
of this Court, the appellant must stand or fall by his grounds of
appeal, although the Court has the discretion to consider other
matters as it may consider relevant in the circumstances. The
question here is partly whether there are any circumstances that
should constrain this Court to consider other factors outside the
stated grounds of appeal. I will revert to this issue later below.
[12] In this case the Deputy Sheriff delivered the summons on the
appellant personally on 9 December 2008. In the return of service
at page 22 of the record of proceedings the Deputy Sheriff makes
it abundantly clear that “I served summons upon the defendant
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personally at Thaba-Khupa and he signed to acknowledge the
service.” A return by Deputy Sheriff is prima facie proof of what is
stated therein. This is so because the Deputy Sheriff is an officer
of the court and his return, unless shown to be false must be
accepted as reflecting the truth of what it says. Persuasive
authority for the proposition that the return is prima facie proof of
what is stated therein is the various judgments of the High Court.
[13] On 18 February 2009 the respondent applied for default
judgment purportedly in terms of Rule 27 (11) of the High Court
Rules and judgment was entered on 19 February 2009. It seems
to me that the relevant Rule is Rule 27(3) because there is no subrule (11) in that Rule. I may also observe that the application for
default judgment was not made on notice to the appellant because
as at the date of the application and the date it was granted, an
appearance to defend had not been entered.
[14] An appearance to defend was however entered for the
appellant by EH Phoofolo & Co, c/o Mahase Chambers, Legal
Practitioners, on 27 March 2009. This was just over a month after
the default judgment was granted. One wonders it was that the
legal practitioners entered the appearance some four months after
service of the summons and a month after the grant of the default
judgment? Only them can explain. The appellant denied that he
was served with the summons or that an appearance to defend was
entered on his behalf by Phoofolo & Co. This denial and an
9
explanation as to how it was that the appearance was entered are
contained in paragraph 3 of the answering affidavit where it is
stated-
“…I have indicated that I only came to know the judgment when a
writ of execution was served upon my wife on the 26 th day of
August 2011. …I must indicate that I never instructed M MAHASE
CHAMBERS in this matter, it is possible that he find (sic) the matter
in other places and knowing that he represented me in all my
matters then he issued appearance to defend but it is not through
my instructions and knowledge.”
[15] Phoofolo & Co. could only have entered the appearance
because they had been given the summons by the appellant and
had become aware that a default judgment had been entered. At
that point in time Phoofolo & Co could have acted only on the basis
that they had been given the summons or it had come to their
attention that a judgment had been entered against the appellant.
Either way they would have advised the appellant of the action that
they had taken. It would therefore not be with a sound basis to
hold that at the very latest the appellant became aware of the
default judgment on or about the time that Phoofolo & Co. entered
an appearance for him.
[16] The Deputy Sheriff and the legal practitioners in Phoofolo &
Co. are officers of the court. The former alleged that he delivered
the summons to the appellant personally and the latter entered an
appearance for the appellant. No reason is advanced as to why the
Deputy Sheriff would have filed a false return. Phoofolo & Co. filed
10
no affidavit in support of the appellant’s assertion that they
entered appearance without his instructions. By his own
admission they represented him in all his matters. He could have
easily obtained a supporting affidavit from them. In my view the
appellant’s bare denial that he did not receive the summons and
his failure to get a supporting affidavit from Phoofolo & Co. that
they entered an appearance without his authority are a sufficient
indication that the appellant is untruthful and therefore evidence
against him. I am satisfied that the summons was personally
delivered to him and that he signed for it as stated in the return of
service. I am also satisfied that Phoofolo & Co. entered appearance
for him on his instructions.
[17] This Court should be loath to doubt the professional integrity
of its officers. Mr Mots’oari was also unable to explain why the
said attorney who had allegedly filed a Notice of Appearance to
Defend without a mandate was not asked to file an affidavit
explaining why he had done so. It is highly improbable that an
officer of this Court would have done what the appellant would like
this Court to believe he did in this connection. One would have
expected that the appellant would ask the attorney to file such an
affidavit failing which, the appellant himself would file an affidavit
indicating that the attorney has refused.
None of these were
presented before this Court. In the same way the appellant’s failure
to provide a tangible reason for not defending the action was not
convincingly explained before us. Thus, if the above grounds of
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appeal were anything to go by, this appeal would ordinarily be
dismissed.
[18] The court order was not attached to the papers, but the writ
of execution bearing the stamp of the Assistant Registrar of the
High Court is proof enough that the default judgment was entered
on 19 February 2009.
[19] The appellant lodged the application for the rescission of the
default judgment on or about 24 August 2011. He averred that he
became aware of the default judgment on 19 August 2011 after a
writ of execution was served on his wife on 18 August and so
applied for rescission immediately. This is the application that was
dismissed by his Lordship Molete J on 26 September 2013, the
decision now appealed. The notice of appeal was filed on 30
October 2013 and the appeal heard this July 2015 session of the
Court.
[20] The default judgment was entered against the appellant only
because he did not defend the claim after he was personally served
with the summons. He did not advance good and sufficient cause
for the rescission of the default judgment. To succeed in such an
application one has to show good and sufficient cause i.e. give a
reasonable explanation for the default; show that the application
is made bona fide and show a bona fide defence to plaintiff’s claim
(see GD Haulage (Pvt) Ltd v Mumugwi Bus Service (Pvt) Ltd
12
1980 (1) SA 729 (ZRA) and Chetty v Law Society, Transvaal
1985 (2) SA 756 (A) at 765 A-G). The appellant’s application was
dismissed because he failed to show good and sufficient cause.
Even though the judge a quo did not give detailed reasons for
dismissing the application he at least stated that the application
was “time barred to the extreme.”
[21] One of the essentials for establishing good and sufficient
cause is that the application must be bona fide. On this score the
applicant failed dismally. At the hearing he conceded that he
applied for the loan in his personal capacity. Indeed he went on to
sign the agreement in his personal capacity. The price of the
caterpillar was some M104 000.00. The appellant paid a deposit of
some M28 000.00 hence he was sued for the balance of about M72
000.00. That deposit was to be paid on signing the agreement. That
explains why the invoice is dated 14 September 1993 and the
agreement was only signed about three weeks later on 6 or 7
October 1993. The respondent averred that it delivered the
caterpillar vehicle to the appellant. There is some evidence, though
not the best evidence, that the caterpillar vehicle was purchased
for the appellant and transported from South Africa into Lesotho.
The appellant was sued for the balance of the purchase price 10
years later from the time that he signed the agreement and paid
the deposit. One would have thought that, if for ten years the
vehicle had not been delivered to him, he would have long
instituted action either for the return of his money or for the
delivery of the vehicle. It was only in 2009, after he was personally
13
served with the summons, failed to enter an appearance to defend,
and served with a writ of execution that he applied for rescission
of the judgment and alleged among other things that the caterpillar
vehicle was not delivered to him.
[22] The appellant’s grounds of appeal did not raise the issue that
the caterpillar vehicle was not delivered. They only dealt with the
objection to the judgment of the court a quo that the application
was irredeemably out of time. In my view, the grounds of appeal
carry no merit at all.
[23] However this aspect of the case has exercised our minds quite
heavily against just dismissing this appeal. It happened that, at the
hearing of this appeal, this Court enquired from Advocate S.
Malebanye KC who appeared for the respondent as to whether the
Court a quo did apply its mind to the averment by the appellant
that the caterpillar which the respondent had allegedly purchased
and was delivered by J& G Transport was as a fact, ever delivered
to the appellant or his business place. The learned counsel was not
able to point to an affirmative answer on the record. There was
indeed no documentary support that it was ever delivered to the
appellant and there was no evidence filed of record by whoever
might have delivered it either at the appellant’s place of business
or to the appellant himself or left it with the appellant’s employees.
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[24] In all fairness to Advocate S. Malebanye KC, he conceded
this point and he drew the attention of this Court in the interest of
justice, to the terms of Rule 4 (5) of the Rules of this Court that it
was permissible to resolve this appeal on any ground other than
those relied upon by the parties. We were very grateful to the
learned counsel for his mature guidance of this Court in this
regard. Advocate Malebanye also urged us that, it would not be
in the interest of justice to dismiss the appeal if we were of the view
that it is highly probable, regard being had to the record before us,
that the caterpillar may have not been delivered at the appellant’s
place of business or to the appellant. This concession was clearly
well made for this is an issue on which a Court of justice would not
just let pass while at the same time aware that it raises some
eyebrows.
[25] It is true that this Court has to ordinarily decide an appeal on
the basis of the grounds filed on appeal and, no party is permitted
to argue an issue which has not been raised in the grounds of
appeal. Rule 4 (5) of the Court of Appeal Rules 2006 provides as
follows:
“The appellant shall not argue or rely on grounds not
set forth in the notice of appeal unless the court
grants him leave to do so. The court, in deciding the
appeal, may do so on any grounds whether or not set
forth in the notice of appeal and whether or not relied
upon by any party.”(Underlining added for
emphasis)
15
[26] In my opinion, it is clear that the appellant has all along been
disputing that he did receive the caterpillar as it was not delivered
to him. In my opinion, the Court a quo erred in not addressing this
issue. This failure culminated in an injustice on the appellant.
[27]
Section 3 of the Hire Purchase Act No. 27 of 1974 provides
for the transfer of the possession of the goods sold, while the
purchase price is to be paid in instalments. This clearly indicates
that there must be delivery of the goods to the purchaser. A hire
purchase agreement is a species of the contract of sale. The
essentials of a contract of sale are agreement upon the merx, the
price and the obligation of the seller to deliver the merx to the
purchaser (See: Commissioner for Inland Revenue v Wandrag
Asbestos (Pty) Ltd 1995 (2) SA 197 (A) p214). A hire purchase
agreement is a form of credit sale. A credit sale is one in which the
time for payment has been postponed for a substantial, i.e., noneligible, period after delivery (Laing v SA Milling Co. Ltd., 1921
AD 387 at pp. 394 - 5, 400 - ; R. v Salaam, 1933 A. D. 318 at
p. 320).
[28] According to our law, ownership cannot pass by virtue of the
contract of sale alone: there must, in addition, be at least a proper
delivery to the purchaser of the contract goods (see Crockett v
Lezard, 1903 T.S. 50 at pp. 592-3; Commissioner of Customs
and Excise v Randles Bros. and Hudson Ltd., 1941 AD 369 at
p. 398; Ambassador Factors Corporation v K. Koppe & Co.; K.
Koppe & Co. v Accreylon Co. Inc., 1949 (1) SA 312 (T) at p.
16
318; American Cotton Products Corporation v Felt and
Tweeds Ltd., 1953 (2) SA 753 (N) at pp. 756 - 7). Whether
delivery alone will suffice depends in general upon the intention of
the parties (See: Weeks and Another v Amalgamated Agencies
Ltd. 1920 AD 218 at p. 230; Eriksen Motors (Welkom) Ltd. v
Protea Motors, Warrenton and Another, 1973 (3) SA 685 (AD)
at p. 694).
[29] The issue whether a property that is said to have been sold
and delivered to a purchaser was as a fact so delivered, is one that
cannot be lightly ignored. A seller who claims for his purchase
price must prove that the property subject of the sale was as a fact
delivered to the purchaser. Otherwise to allow a claim short of
proving this aspect is a recipe for injustice.
[30] It is for the foregoing reasons that this Court should be
inclined to allow this appeal as the Court a quo did not investigate
this issue despite the fact that it was raised (albeit belatedly). Even
if it had not been raised at all, the Court is still obliged to do justice.
The courts of law do not grant orders simply because they have
been asked for. The courts have an obligation to ensure that even
where causes are not opposed or defended, there is proof on a
balance of probabilities that the basis of such a cause does exist.
In the present case the High Court did not investigate this crucial
aspect.
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[31] In the result, my view is that this issue ought to have been
investigated. There must have been evidence to prove delivery of
the caterpillar to the appellant. I say this because it appears this
was one of the appellant’s defences to the claim and the appellant
ought to have been allowed to defend himself in this regard.
[32] The order of this Court is therefore that:
(a) The appeal succeeds and the judgment of the court a quo is
set aside.
(b) The matter is remitted to the Court a quo to enable the
appellant to file his plea and prove his defence.
(c) Since this appeal has been allowed on a ground other than the
one relied upon by the parties herein, it would be in the
interests of justice that there be no order as to costs. There will
therefore be no order as to costs.
_______________
DR K.E.MOSITO
President of the Court of Appeal
I agree
______________
P.T. DAMASEB
Acting Justice of Appeal
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I agree
_________________
M.C CHINHENGO
Acting Justice of Appeal
For Appellant
:
For Respondent:
Advocate M. Mots’oari
Advocate S. Malebanye KC